The issues raised on this site have far reaching importance for those affected by the appalling and licensed abuse perpetrated by CAPSTONE MORTGAGE SERVICES, and implications for those who never even dreamt that this could touch their lives.
The continued licence of this abuse by the FAILED REGULATORS has implications for the wider economy also. More money is being sucked OUT of the real economy into the dead American vultures, via PwC, the courts and the total inaction of the FSA.
That does no-one any good.
It really is within the FSA’s powers to take action. Can the short term grubby financial gain of a few criminals really be put before the wider interests of the economy, the rule of law and consumer protections?
At the moment it very much seems that way.
The propaganda tells you that the loans and mortgages were “sub-prime”. But in reality that is far from the truth. Jackal rate interest rates, outrageous charges, maladministration galore and psychological abuse would take their toll on anyone. The truth is that it is the originators, the spvs and the appalling administrators who are sub-prime, toxic and delinquent. And the FSA allows their toxic effects to spread everywhere, distorting the economy and screwing the tax payer in the process. Hundreds of thousands will be forcibly repossessed and dispossessed but millions will pick up the bill.
So who was supposed to protect us from this and still is entrusted with this pivotal role? In the main it’s the FSA. Here’s a quick reminder of the wonderful protections from all this abuse we are provided with:
The FSA took on responsibility for mortgage regulation in 2004. FSA Statutory objectives include securing the appropriate degree of protection for consumers (The Financial Services and Markets Act 2000 (Part 1, Section 3)
The FSA also regulates by reference to its own principles of good regulation amongst which are that a firm must conduct its business with due skill, care and integrity; observe proper standards of market conduct and pay due regard to the interests of its consumers and treat them fairly. Finally a firm must take reasonable care to ensure the suitability of its advice and discretionary decisions for any customer who is entitled to rely upon its judgment.
The FSA’s own performance report has nine high level indicators by which to assess performance in achieving its strategic aims. Indicator four is particularly instructive:
(4)Firms are financially sound, well managed and compliant with their regulatory obligations;
Furthermore in reference to the FSA Treating Customers Fairly—outcomes for consumers, July 2006.
“Consumers can be confident that they are dealing with firms where the fair treatment of customers is central to the corporate culture. Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale”
Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint.”
If a firm breaches FSA’s rules, enforcement action may follow. If enforcement action is taken the FSA has a range of disciplinary, civil and criminal powers which it can use against regulated and non-regulated firms. The sanctions include financial penalties, removal of authorisation or even criminal prosecution in cases of misconduct.
Additionally, The Unfair Commercial Practices Directive (UCPD 2008) seeks to protect consumer interests from unfair business-to-consumer commercial practices. In particular, commercial practices will be unfair if they are misleading (this includes both acts and omissions) or aggressive.
Further the UTCCRs (1999) provide that: (a) a consumer may challenge a standard term in an agreement on the basis that it is “unfair” within the Regulations and therefore not binding on the consumer.
The scale of consumer detriment by consequence of the practices identified in paragraph 10are part of the corporate culture of the so called “sub-prime” market. Such practices represent clear contempt for the rules and regulations the FSA in conjunction with the OFT and the FOS have laid down. Regulation is clearly insufficient. Only the FSA, together with the FOS and the OFT can give consumer protections real effect. Qui custodientipsoscustodes?
There has been much recent discussion elsewhere that the regulatory systems and authorities have failed in their primary duties of oversight and compliance and that better governance is needed. It is submitted before this committee that where the law is clear then observation of the various laws and regulations must be enforced. In absentia the rule of law and the sovereignty of parliament are subjugated to the will of the finance industry, a clear case of the tail wagging the dog.
The regulatory instruments are clear but seem unable to prevent breaches so as to lack effect. The FSA seems unable to sanction firms breaching its own regulations, often arising from EU directives, which if inadequately applied lay the state itself (or various emanations thereof) potentially open to damages claims, chiefly under the Francovich principle.
Then of course there is the FSMA 2000
This is massive dense, and complex.
It will be noted that section 150 holds out some hope for the poor bloody battered consumer of this ‘mortgage’ fraud and thievery. But I think that sections 397 and 404 hold out a bit of hope also. Again though, it will rely on pressure being applied to the USELESS AUTHORITIES TO WAKE UP AND SMELL THE COFFEE.
LET’S JUST TAKE A LITTLE LOOK AT THOSE SECTIONS AND WHAT THE FSA COULD BE DOING. NO REFORMS ARE NECESSARY AND THEY COULD ACT TODAY.
(1) A contravention by an authorised person of a rule is actionable at the suit of a private person who suffers loss as a result of the contravention, subject to the defences and other incidents applying to actions for breach of statutory duty.
(2) If rules so provide, subsection (1) does not apply to contravention of a specified provision of those rules.
(3) In prescribed cases, a contravention of a rule which would be actionable at the suit of a private person is actionable at the suit of a person who is not a private person, subject to the defences and other incidents applying to actions for breach of statutory duty.
(4) In subsections (1) and (3) “rule” does not include—
(a) listing rules; or
(b) a rule requiring an authorised person to have or maintain financial resources.
(5) “Private person” has such meaning as may be prescribed.
Part XXVII Offences Miscellaneous offences
397.—(1) This subsection applies to a person who—
(a) makes a statement, promise or forecast which he knows to be misleading, false or deceptive in a material particular;
(b) dishonestly conceals any material facts whether in connection with a statement, promise or forecast made by him or otherwise; or
(c) recklessly makes(dishonestly or otherwise) a statement, promise or forecast which is misleading, false or deceptive in a material particular.
(2) A person to whom subsection (1) applies is guilty of an offence if he makes the statement, promise or forecast or conceals the facts for the purpose of inducing, or is reckless as to whether it may induce, another person (whether or not the person to whom the statement, promise or forecast is made)—
(a) to enter or offer to enter into, or to refrain from entering or offering to enter into, a relevant agreement; or
(b) to exercise, or refrain from exercising, any rights conferred by a relevant investment.
(3) Any person who does any act or engages in any course of conduct which creates a false or misleading impression as to the market in or the price or value of any relevant investments is guilty of an offence if he does so for the purpose of creating that impression and of thereby inducing another person to acquire, dispose of, subscribe for or underwrite those investments or to refrain from doing so or to exercise, or refrain from exercising, any rights conferred by those investments.
Would not the investors rely on this. I should think they damn well would.
(8) A person guilty of an offence under this section is liable—
(a) on summary conviction, to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum, or both;
(b) on conviction on indictment, to imprisonment for a term not exceeding seven years or a fine, or both.
(9) “Relevant agreement” means an agreement—
(a) the entering into or performance of which by either party constitutes an activity of a specified kind or one which falls within a specified class of activity; and
(b) which relates to a relevant investment.
Part XXVIII Miscellaneous Schemes for reviewing past business
404.—(1) Subsection (2) applies if the Treasury are satisfied that there is evidence suggesting—
(a) that there has been a widespread or regular failure on the part of authorised persons to comply with rules relating to a particular kind of activity; and
(b) that, as a result, private persons have suffered (or will suffer) loss in respect of which authorised persons are (or will be) liable to make payments (“compensation payments”)
OK. So even if it were the case that WE can’t make it stick, because we are here to be abused, ripped off, dispossessed and generally ignored, it would most certainly seem to be the case that the investors almost certainly COULD make it stick. All it needs is for one-group of investors to come forward and say, much like we have, “…this isn’t what we signed up to…”